Brand Equity is an intangible positive asset which describes your brand’s figurative value. That value is determined by consumers perception of the brand and experiences whether good or bad with the brand. Positive Brand Equity occurs when an individual may favor one product/ service over another because of the particular brand associated with it, which can boost the price a business will charge, increase the rate of success if a business was to extend their offerings and inflate the likelihood of a consumer to choose your product/ service over a competitors. Brand Equity is dependant on brand loyalty, brand awareness and perceived quality through brand associations. For these reasons, it is clear to see that brand equity is not built overnight.

8 reasons you need to start building brand equity

If brand equity is something that you see value in your business, then it is something you need to work on every day. As positive brand equity can determine how you position your business in the marketplace.


How do you capture Brand Equity for yourself?


8 reasons you need to start building brand equity


Brand Associations

Just like how we choose to associate with our friends, work colleagues, and acquaintances, etc. People tend to do the same with brands. Brand association is anything which the customers think of or relate to the brand. This could be as complex as employees or as simple as colour, for example, Coca-Cola and red.

Brand Associations are built on the following:

  • Customers contact with the organization and its employees;
  • Advertisements;
  • Word of mouth publicity;
  • Price at which the brand is sold;
  • Endorsement;
  • Quality of the product;
  • Products and schemes offered by competitors;
  • Product class/category to which the brand belongs;
  • POP ( Point of purchase) displays; etc



A major driver of branding is the fulfillment of a brand promise. If a brand does not live up to the promised experience then it will attract negative brand equity. Customers assess a brand by comparing its offering with its competitors on the basis of certain qualitative and quantitative parameters. The product quality is a qualitative measure and depends completely on the customer’s perception. Back when I was learning about Marketing, the price point was a big part of a positioning strategy and your customer’s subsequent perception.



Customers consciously preferring one brand over the other is a strong indicator of brand equity at play in the marketplace. A preferred brand can charge a higher price for the same product. Preference can be generated by customers having good experiences with the brand. Customers become familiar with the brand and recognise it, trial it and even begin to prefer it.



Loyalty is an old buzzword that was thrown around religiously about 20 years ago. The loyalty concept was something every business wanted to capture for themselves. Fast forward to the modern day and age, the concept of loyalty is a lot harder to obtain. However, brand equity can help solidify brand loyalty. Think of the old Mac vs PC debate. It is very unlikely that someone who supports Mac would ever think of buying a PC. A lot of creating brand equity with the hope of boosting brand loyalty is about creating a product which resonates with its audience. After a series of good brand experiences, users not only recommend it to others, it becomes the only one they will buy and use in that category. They think so highly of it that any product associated with the brand will benefit.


The Bottom Line


Brand Equity is an Asset

Building Brand Equity is building an asset. An intangible asset which adds genuine value to your business. Just like other assets, this too can be sold, licensed or leased to others.


Brand Equity allows you to charge a Price Premium

There is no other reason why Apple does not drop prices of its older model phones after it has just launched a new product than their brand allows them to charge a price premium and their customers are willing to pay it. Apple’s brand equity allows them to charge more for their products than the actual market price.


8 reasons you need to start building brand equity


Brand Equity will increase your Market Share

Positive brand equity can result in more loyal customers, better word of mouth and the desire for your customers to associate themselves with your brand. All these factors lead to customers who prefer one brand over another and in turn increases market share.

Brand Equity makes it easier to expand your Product Line

Think of powerhouse brand Virgin who started as a music producing company and now has planes, trains, and water. Think of Coca Cola, Coca-Cola Zero, Coca-Cola Vanilla, Coca-Cola Sugar-Free. It is much easier to launch other facets of your business if you have a positive brand equity.